Result
- Total return (on total contributed)60.00%
- Dollar gain$6,000.00
- CAGR after feessubtracting 0.10% annual fee drag9.76%
- Investment doubled in7.3 years (Rule of 72)
How to use this calculator
- Enter what you invested and what it's worth now (or sold for).
- Type how many years you held it (decimals OK — 1.5 = 18 months).
- Add the annual fees — typical index fund: 0.03-0.10%, actively managed: 0.5-1.5%.
About this tool
Two return numbers most people confuse: total return (raw % gain since you bought) and CAGR (compound annual growth rate — what your money actually earned per year on average). For investments held more than a year, CAGR is the apples-to-apples number you want. This calculator shows both, plus the brutal effect of annual fees: a 1% expense ratio over 30 years can eat 30% of your final balance. The "Rule of 72" line is a useful shortcut — divide 72 by your annual return to estimate doubling time.
How it works — the formula
Total return = (final − initial) / initial
CAGR = (final / initial)^(1 / years) − 1
IRR: rate r such that Σ CFₜ / (1+r)ᵗ = 0Total return is the simple percentage gain. CAGR (compound annual growth rate) annualizes that gain assuming smooth compound growth — useful for comparing investments over different horizons. Internal Rate of Return (IRR) is the discount rate that zeroes out the net present value of all cash flows, the standard money-weighted measure when contributions and withdrawals happen at different times.
Worked examples
- Inputs:
- initial = $10,000, final = $14,500, years = 5
- Output:
- Total return = 45.0%; CAGR ≈ 7.71%
- Inputs:
- rate = 8%
- Output:
- 72 / 8 ≈ 9 years (exact: ln(2)/ln(1.08) ≈ 9.006)
- Inputs:
- $100k for 30 years at 7% gross
- Output:
- No fee → $761,226; 1% fee (6% net) → $574,349; the fee cost ≈ $186,877
Limitations
- CAGR smooths over volatility; two investments with identical CAGR can have very different drawdowns and risk.
- Past returns are not predictive — equity premiums vary by decade.
- Fees, taxes, and inflation are not subtracted unless you input net or real rates.
- IRR can produce multiple valid solutions when cash flows change sign more than once.
Return calculations are illustrative. This calculator does not provide investment advice — past performance does not guarantee future results, and all investing involves risk of loss.